Ashok Leyland to Issue Rs 870 Crore Corporate Guarantee for UK Subsidiaries

21 Aug 2023 , 12:51 PM

On August 18, Ashok Leyland, an automotive manufacturer, announced its decision to provide a corporate guarantee cover amounting to Rs 870 crore for its UK-based subsidiaries, Optare Plc and Switch Mobility Ltd. The corporate guarantee aims to safeguard the lending facilities of these subsidiaries and is not connected to the promoter or promoter group, as stated in the regulatory filing.

The guarantee amount specified in the exchange filing is ‘GBP 82.10 million,’ approximately equivalent to Rs 870 crore. The announcement follows Ashok Leyland’s board approval, four days prior, to acquiring shares of OHM Global Mobility Private Limited (OHM India) from OHM International Mobility. An investment of up to Rs 300 crore into OHM India is planned by the Hinduja group flagship firm.

Recently, Ashok Leyland secured an order worth Rs 800 crore in the defense sector, which includes the procurement of the Field Artillery Tractor (FAT 4×4) and the Gun Towing Vehicle (GTV 6×6). The company reported a substantial 747 % YoY surge in standalone net profit for the quarter ending June 2023, amounting to Rs 576.42 crore. The increase was attributed to factors like deferred tax credit, higher volumes, reduced commodity prices, and cost-saving measures.

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